Retailers Gain CRM Vision
Retailers have advanced in their use of CRM technologies, although they continue to struggle to get CRM information to the proper corporate users, according to a report released yesterday at the National Retail Federation's CRMretail Conference (part of the NRF Retail Advertising Conference). The "National Retail Federation's Customer Centricity Study" reveals CRM in retail has evolved from an idea in the 1990s to implementation of component parts a couple of years ago to corporate initiatives now.
Seemingly anomalous data supports that theory, according to Janet Murphy, president of Ogden Associates, which conducted the study for the NRF. While 65 percent of retail firms surveyed said they have a CRM vision now (compared to 79 percent a year ago), that doesn't mean that the number of companies with a CRM vision has dropped, Murphy said. Instead, now companies see CRM as strategy and technology, meaning the true vision is harder to achieve. With strategy as part of the CRM vision, ROI is more difficult to quantify, because it's hard to calculate a cost or return on strategy changes, according to Murphy. Benefits that survey participants expect from CRM include increased revenue (all respondents), better customer retention (98 percent), increased profitability (83 percent), increased customer acquisition (83 percent), and cost savings (65 percent).
Retailers admit they're still facing challenges in communicating CRM-related data and analytics to the proper corporate users, according to Murphy. Last year, roughly 80 percent of respondents said the CRM-related information wasn't getting to all of the right recipients. That figure dropped to roughly 60 percent in the current survey, but that's still extremely high, Murphy notes. Top reasons respondents cited for the glitches in CRM programs included limited resources (82 percent) and difficulty in coordinating among different departments in the retail firm (79 percent).
Retail companies are staying committed to CRM, however. According to the survey, 65 percent of firms are planning to increase their spending on CRM technology in 2006. "CRM is of increasing importance to retailers for several different reasons," Murphy says. "There are no longer any market borders. It's becoming more difficult to have product differentiation, there's an accelerated product life cycle, and it's becoming more difficult to survive in the market."
If a retailer is truly going to adopt a CRM vision, it's imperative that that vision be conveyed to the employees, many of whom are in customer contact positions, but senior- level leadership is needed, according to Murphy. Retail's evolving implementation of CRM strategies will create new demand for employees and managers with cross-disciplinary skills in the areas of marketing, sales, advertising and related specialties, she adds: "CRM will have more impact on [retail] departments, advertising and promotional activities, and introductions of new products and services. Retailers can move ahead [with CRM strategies] with confidence; they don't have to do everything at once."
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